Blogs kill books. At least, that’s what I always thought. Between 1988 and 2000, I wrote four1 books and edited a couple of volumes. In 2002, I started blogging, and I haven’t done a book since then.

But, in the mysterious way of things, it turns out that blogs generate books, or at least book contracts. In comments at Crooked Timber not long ago, Miracle Max wrote
The discredited ideas theme really needs a book, and JQ appears to be the ideal person to write it.
I will even contribute the title: “Dead Ideas from New Economists.” No charge.
Brad DeLong picked it up, and a couple of days later I got an email from Seth Ditchik at Princeton University Press suggesting that it really would be a good idea. Now, we have a contract, and we’re going to use Max’s suggested title.

I know, I know, I shouldn’t read the Oz, and I certainly shouldn’t read Glenn Milne. But, as with the whole emailgate mess, it’s hard to look away from a trainwreck like this. And you do get the occasional gem, such as Milne’s (non-ironic) description of News Limited’s reporting on the Rudd government as “fair and accurate” and “balanced”.

That’s the title of my Fin piece on Thursday (over the fold). As happens more or less routinely, it attracted a letter from Des Moore, formerly prominent as a Treasury official, then a rightwing economist, and now a climate science delusionist. Strikingly, and like most advocates of inaction, Moore doesn’t bother to debate the economics, where he would at least have some credibility as a commentator, if not much of a case. Instead, he recycles a bunch of the usual delusionist talking points.

It goes without saying that Moore has no qualifications relevant to climate science (I don’t either, but then I don’t set myself up as being able to refute the experts). What’s even more striking is that he, like so many delusionists, seems to be totally ignorant of basic statistical principles, and even to have forgotten stuff he must have been at least vaguely aware of in his former career as an economist. What else can be said about his repetition of the claim that “global warming stopped in 1998”? Every economist knows that you can’t measure trends properly without taking account of cyclical fluctuations about those trends. The worst thing you can do is take a peak to trough measurement.

As delusionists were very keen to point out at the time, 1998 was an extreme El Nino year, when temperatures rose well above the long-run (increasing) trend. Fortunately, we haven’t had such an extreme since then, and 2008 saw a fairly strong La Nina, which provides Moore and others with their talking point.

But eyeballing the data shows the obvious trend,

NOAA climate data

and anyone with a simple regression function on their spreadsheet can confirm it.

Like a large proportion of the population (but unlike two lucky winners) I’m a little bit poorer after last week’s jackpot lottery. That might put me in the right frame of a mind for a visit to the Commonwealth Treasury next week where, among other things, I plan to talk about how to treat gambling in the context of the Henry Review of Taxation.

State governments are heavily reliant on revenue from gambling, which is a combination of explicit taxes and payments for monopoly privileges. But gambling (particularly casino gambling and racetrack betting) is socially destructive, since the majority of the revenue is derived from problem gamblers. And while restrictions on gambling were justified by these social ill-effects, the current structure of taxation actually makes things worse, by ensuring that gamblers lose faster. Policy must also deal with the fact that, for the great majority of participants (who only account for a minority of expenditure, however) gambling is harmless and pleasurable. That’s particularly true of non-instant lottery gambling.

I’ve been thinking about how to fix this, and I’ve had the idea of subjecting gaming enterprises like casinos to a (net) revenue cap. That is, rather than being restricted to a certain number of machines, tables and so on, they would be limited in the amount they could take from the machines in a given year. This would eliminate incentives to increase the take from gaming, and replace it with incentives to do more business selling food, drinks, entertainment and so on. It would also increase the incentive to comply with measures aimed at restricting the access of problem gamblers, since they would not change the gaming take and would presumably spend less on other goods and services. My worry, not fully worked out, is that gaming enterprises would just reduce service and extract their allowable revenue from the problem gamblers as cheaply as possible.

Over at Crooked Timber, we’ve had various versions of the case for and against the use of (micro)economic rational actor models in the social sciences lately, so I thought I would weigh in with my version of the case against. It has three main elementsRead more…

It’s now the second half of 2009, so it’s a convenient time to remember that, early last year, Keith Windschuttle published a piece in the Oz, touted as an extract from his “forthcoming, later this year” Volume 2 of The Fabrication of Australian History . This Volume 2, devoted to the Stolen Generations, and attacking historians such as Peter Read is different1 from the Volume 2 announced back in 2002 and promised for 2003, in which Windschuttle was supposed to make good his claims that Henry Reynolds had fabricated the history of frontier conflict in Queensland.

Neither promised Volume 2 has appeared, and there is no sign that either of them ever will. And there was even supposed to be a Volume 3 at one time, IIRC.

1 I’ll leave to the philosophers the question of whether two non-existent books can be said to be different or (as I suspect on reflection) all non-existent books are the same.

I’m not all that good at remembering which way various standard distinctions go, especially when I have some underlying doubt about them. In classical hypothesis testing, for example, Type I error involves erroneously rejecting the null hypothesis, while Type II error involves erroneously failing to reject. Since I mostly think in Bayesian terms, I regard the whole classical setup as a fairly arbitrary social convention. One result is that I have to remind myself, fairly regularly, which type of error is which.

I have a different kind of problem with the terminology of skewness. Positive skewness is often called “right skewness”, but it seems to me this is the wrong way around. Suppose I started with a zero-mean symmetrical distribution (say normal) and reduced some of the values near the mode/mean/median. The result would be a distribution with negative mean, mode and median, and positive skewness. In visual terms, the peak of the distribution would be pushed to the left, while the right hand tail would now be long. In ordinary terms, I would say the distribution had been skewed to the left. Any comments?